The View From GameStop's Window: Retail Giant Talks Gaming In 2007

Let's run down the current platforms, and if you could, give us your opinion on how that platform is doing right now. What opportunity does the PlayStation 2 have, for example?

BM: I see great opportunity. There are 60 new titles that are coming on PlayStation 2 between now and the end of the holiday season. Sony made a comment a few years ago that there are five years left on the PlayStation 2, and we've had some of the best products released so far this year. God of War 2 is a great example. Phenomenal launch, and it's a lot of good energy. The installed base they have is definitely working with them there. We see several years ahead with PlayStation 2.

Move on to PlayStation 3; how do you feel about that now as it's moving into its second Christmas?

BM: I think that has a lot of different opportunities, because it brings in a different type of consumer. It's really the higher end. It's the core consumer that wants the latest and the greatest. They're more into the technology, they probably already own a high definition television, and surround-sound entertainment system.

They're the consumer that is more into the technology and really getting the benefit of the new development within that high definition game. There are a significant number of new releases that are coming out on the PS3, so we see a good holiday season ahead there as well.

Do you think it's living up to its potential just yet?

BM: I think they're not there yet. I think they've done some moves recently, with the mark-down on the sixty-gig that will help to show that they are reacting. That they see the opportunity, and they know that they need to continue to stimulate that. The eighty-gig is coming out now, and having a game packed in, they see that they have a little catching up to do.

And that brings us pretty nicely to the 360. It looks like they might have a pretty phenomenal holiday. Halo 3 is nearly here, Mass Effect...

BM: Yeah, the 360 lineup is solid. It's really phenomenal -- they've positioned themselves well. Last year we had a two speed strategy going in with the Pro and the Core. This year it is almost double. We have four different hardware SKUs that we have at different price points.

All the way from the Elite, which is fairly new to the market, has a lot of horsepower for the consumer that wants the 120 gig hard-drive. Now we'll begin selling, as all retailers will on Sunday, the Halo 3 Edition, which is basically the Pro model dressed up in the Halo colors, with the headset. Then they also have the Pro console and the Core. They'll be relaunching with a wireless controller, coming up shortly. They understand that there's a consumer at the end of each of those price points, and they have the product for us right now.

There are over a hundred 360 titles that are coming out for the holiday, and they're continuing to expand the platforms into more of the social gaming and the casual games as well. A very solid holiday; as you mentioned, Halo 3 is going to break all records. It already has. It's our highest reservation title, and probably going to be our biggest day-one...

Highest reservation ever?

BM: Yes.

Do you think that it is good for the market to have so many different hardware SKUs? When the 360 was first release, there were questions about whether even having two units was a good idea.

BM: Looking back at it, I would say that they had a pretty good strategy even at launch. I'm not sure, I would've preferred to have one. It always complicates things, having multiple SKUs, but now the time is right. Really, the Halo 3 is an in-and-out opportunity, for that kind of collectible consumer. So there are really three different models that will be on an on-going reorder, replenishment basis. So I agree with the strategy. I think that there are consumers at all levels.

Definitely, with the high-end gamer, they want all the horse-power, they want the bigger hard drive, they want to be able to download the larger games, and have the social thing. They need to have the social gaming aspect, being on Live, and having the download content. Then you have an opportunity below it. You get to the Wii, at $249, and then the next thing down with the PlayStation 2. There definitely is an opportunity to serve that consumer as well.